As Tony Blair entertained Ariel Sharon at No 10 earlier this week, it is possible to imagine that beyond the polite small talk, Blair was trying to convey his concern about the need to maintain momentum for the truce that finally launched the Middle East road map. It is likely Blair urged Sharon to support the reformist Palestinian government of Mahmoud Abbas; Sharon would have assented, but claimed that further progress was entirely contingent on the Palestinians performance on security.

For the moment at least, these appear to be the issues. The Palestinians need a substantial prisoner release and visible changes on the ground, and the Israelis want to make sure that the Palestinians deliver on security as promised. And, for the moment, it is not entirely unlikely that both sides will get some (but not all) of what they need - enough to keep the process afloat for the next few months such that the prospects of further progress remain alive.

But even if this momentum can be sustained, it will soon roll up against some very hard facts on the ground. The geo-political map of Palestine is being transformed and with it the possibility of a resolution based on the idea at the heart of the current process: partition between "the state of Palestine and the state of Israel living side by side in peace", according to President Bush's "vision".

While the international community has long believed the national claims of both sides can only be reconciled through some Solomonic division of land, at different stages each side has been ambivalent (to say the least) towards the idea that their aspirations have to be scaled down to a limited territorial base. After decades of rejectionism the Palestinian mainstream adopted partition in 1988, and the notion of a Palestinian state in the lands occupied in 1967 (the West Bank, East Jerusalem and Gaza) now forms the bedrock of Palestinian national aspirations.

By contrast the Zionist movement's early enthusiasm for the two-state solution faded after the establishment of the Israeli state. Indeed, since 1948, no Israeli government had ever endorsed the idea of two states, until Ariel Sharon, under pressure to accept the road map, pushed it through his cabinet last May.

But the apparent paradox of an ultra-rightwing Israeli government adopting the two-state vision is not hard to unravel. Sharon knows that the "state" he has in mind is so constrained and contained it is all but meaningless. As Israeli settlement has continued to lacerate and divide the Palestinian hinterland, the so-called "separation fence" (an 8m-high concrete wall with watchtowers and mined tracker paths) is slowly but surely being put in place.

Ostensibly meant as a security perimeter to defend Israel from Palestinian attacks across the 1967 armistice lines, its ultimate purpose is to create a system of enclosures designed to envelop Palestinian territories in the West Bank from all directions.

The proposed route of the "fence" incorporates Israeli settlements deep in the Palestinian hinterland, and runs parallel to the Jordan Valley to prevent any Palestinian seepage eastwards. Alongside the existing enclosure around the Gaza Strip's 1.2 million inhabitants, at least two more enclosed cantons will be carved out of the West Bank, incorporating 2 million Palestinians. Those living outside the fence and areas reserved for Israeli settlement will be left in some as yet indeterminate political and legal limbo.

From Sharon's perspective, this system of enclosures matches the proposed Palestinian state with provisional borders posited by the road map almost too perfectly. The wall, he will claim, is a temporary security measure pending delineation of the final borders between the two states by negotiation. But Palestinians know that few things tend to be as permanent as temporary Israeli measures. Almost all Israeli settlements started as temporary outposts, many under the initial guise of security.

The separation fence, if completed (and it has not yet taken its final and irreversible course), will designate the beginning of a new era. If the historical struggle over land appears to have been foreclosed, the notion of a viable partition of Palestine will be fatally affected, and with it the idea of two national states "living side by side in peace". For Palestinians, the fight may have to shift from a national-territorial focus to a struggle based on mutuality, equality and fundamental political and human rights. This is likely to be no less arduous or intense than the fight against apartheid in South Africa. For Israelis, the congruence between the separation wall and apartheid will entail a radical review of the nature of the Jewish state and its purpose.

Such an outcome is not inevitable. But its likelihood is increasing. One hopes that alarm bells are ringing in No 10 and the White House about the long-term prospects for the road map. But as they meet today, Mr Bush and Mr Blair are likely to have other more pressing short-term issues on their minds.

· AS Khalidi is a senior associate member of St Antony's College, Oxford, and a former Palestinian negotiator